Page 139 - RusRPTAug24

many regions saw higher-than-expected revenues from corporate and personal income taxes, their two main sources of income. However, expenditures grew faster, which increased the number of regions in deficit. This year, overall income growth is expected to slow down while inflation remains relatively high. As of May 2024, income tax receipts were still 35.9% above last year’s levels, but corporate tax receipts were 13.9% below.
Regions will also be allowed to spend the remainders of federal transfers to finance investments falling under the National Projects. At the same time, the amount of money that regional governments can spend on public-private partnership projects will be limited in an attempt to curb wasteful spending.
A major heat wave has led to power outages in several Southern Russian regions—the Rostov and Astrakhan regions, the Krasnodar Territory, the Republic of Dagestan, and the Republic of Adygea—leaving at least 500,000 people without electricity. These problems again highlight the general neglect of Russia’s public utility networks, which has led to increasingly frequent accidents and shutdowns over the past years. Climate change is just one of the reasons behind the increased strain. In Siberian and Far Eastern regions, where, due to Russia’s forced trade pivot to Asian markets currently investment growth is about twice as high as across the country on average, the grid is increasingly overburdened by heavy industrial use. In cities that have seen construction booms over the past years due to subsidized mortgages, utility networks were often not adequately expanded. In Southern Russia, Ukrainian drone strikes against energy infrastructure are also a growing problem. In Dagestan, whose residents have seen consistently poor service over the past years, power cuts have led to protests several times.
6.1.4 Budget dynamics - National Projects
Russia Plans 1.9 Trillion Rubles for New National Economic Project
The Ministry of Economic Development has proposed allocating up to 1.9 trillion rubles for the "Efficient and Competitive Economy" national project from 2025-2030. This proposal, discussed at a government session on June 25, aims to enhance various economic sectors, with the federal budget contributing 999.1 billion rubles. Regional budgets will provide 536 billion rubles, and 343 billion rubles will come from extra-budgetary sources. However, final figures may change as expense prioritisation continues.
Funding and Conservative Scenario
In a conservative scenario, total spending could be 1.4 trillion rubles, with federal expenses reduced to 517 billion rubles, regional budgets contributing 518 billion rubles, and extra-budgetary sources providing approximately 340 billion rubles.
139 RUSSIA Country Report August 2024 www.intellinews.com